Jamaica is attracting high levels of global investor interest attributed to expanding investments in business process outsourcing, tourism, agri-business, mining, energy and manufacturing, plus logistics, medical tourism and the animation arts. However, there is much to know to avoid pitfalls when looking to start your business in this country.
Types of entities
The first step for an entity that would like to operate in Jamaica is to decide the legal structure which would be the best fit and the best suited to your achieving your goals in Jamaica – a Company incorporated or registered under the Companies Act; or a Business registered under the Registration of Business Names Act. Under the umbrellas of both Company and Business, there are a number of options. For overseas investors, the primary route tends to be that of a Company and the primary sub-structure under same that of a Limited Liability Company (LLC) or a Branch having an Overseas Parent ("Overseas Company").
The statutory body in Jamaica which handles registration is the Companies Office of Jamaica (COJ), commonly referred to as the Companies Registry or simply the Registry.
Registration of an LLC
COJ has endeavoured to streamline their registration processes with the creation of a 'superform', which allows companies to complete a single form, used for their entity Registration with both COJ and certain Tax Departments/Arms, simultaneously. This form is called the Business Registration Form (BRF) and it requires certain information about the operation. These include:
- proposed legal structure of the operation, (Company or Business, Private or Public, etc.);
- operation's name (and, in some instances, justification for the name);
- nature of the operation (intended trade activities);
- Registered Address;
- details on the initial members of the
Board of Directors (Directors and Company Secretary);
- while the Members of the Board of Directors do not have to be Jamaican nationals or Jamaican residents, everyone will be required to secure individual Taxpayer Registration Numbers (TRNs).
- the possession of a TRN by a non-resident foreign national does not mean that they will have to file personal Income Tax Returns in Jamaica.
- minimum and maximum number of Directors permitted by the operation's Articles;
- information needed for tax registration.
The BRF is to be signed by all Directors, as well as the Declarant who could be one of the Directors or the Company Secretary or Senior Management.
To accompany the BRF are the operation's Articles and the two must contain consistent details.
The Articles may be generated by you or you may customize them with templated Articles made available to the public by the Companies Registry [Form 1A, 1D, for-profit entities; Form 1B, 1C not-for-profit entities]. Similar to the BRF, the Articles must indicate:
- name of the operation;
- Registered Address (must be situated in Jamaica);
- details on Share Capital where a company is so limited (classes at the time of registration, maximum of each class which may be issued, guidelines/restrictions on the transfer of shares, etc.)
- maximum and minimum number of Directors allowed;
- general dictates and restrictions pertinent for you to include, relating to the running of your operation, including, possibly, restrictions on trade/non-trade activities.
It may prove to be somewhat of a complex process to amend your Articles once they have been registered with the Registry. Therefore, it is important to include all of the pertinent information at the start.
Once the BRF and Articles have been completed, originals of these documents will be required for submission to the Registry, as well as a duly notarized copy (or Jamaica Justice-of-the-Peace duly certified copy) of a current and valid Government-issued photograph-bearing form of identification, along with the relevant filing fees. These will have to be submitted at Site the Companies Registry. Assuming the Registry has no issues, within five working days a Certificate of Incorporation would be issued and the company will be an LLC and permitted to trade.
Registration of an Overseas Company
For the registration of a local Branch of an Overseas Company, COJ will require the completion of Form 31 (as opposed to the "super form' used by LLCs), along with certified copies of the Company's overseas registration documents.
The Form 31 will ask for:
- operation's name;
- overseas Registered Address;
- overseas Mailing Address (if differing from that of the Registered Address, above);
- Place of Business in Jamaica (Address);
- Mailing Address in Jamaica (if differing from that of the Place of Business, above);
- name and address of Agent (individual or entity) authorized to accept service of process in your behalf ('Process Agent');
- listing of Members of the current Board of the Overseas Parent (Names, Contact Addresses, Occupations, Nationalities, Dates of Appointment to the Board).
The Form 31 is to be signed by the Declarant who could be a Director or the Company Secretary or an Authorized Official. Originals of these documents will be required for submission to the Registry with the duly notarized copy of a current and valid Government-issued photograph-bearing form of identification and the relevant filing fees. Baring problems, within five days, a Certificate of 'Overseas' Registration will be issued.
With the issuance of your Certificate of Incorporation for LLCs, the Tax Registration would have been completed by the Registry and you will receive from them the Tax Identification Numbers that are issued by the relevant Tax Departments.
Simultaneous Tax Registration is not (yet) being offered by the Registry to Overseas Companies, so once the Certificate of Registration for Overseas Companies is issued, you must execute your Tax Registration.
Your Tax Registration is to be with the Tax Administration Jamaica (TAJ) for your principal Tax Id., the Taxpayer Registration Number (TRN) and for securing your first Tax Compliance Certificate (TCC). Registration will also need to take place with National Insurance Scheme (NIS) for your National Insurance (NI) Employer's Reference Id., National Housing Trust (NHT) and H.E.A.R.T. NTA. These are the Tax/Statutory Bodies related to three of the five Jamaica Payroll Tax Types.
General Consumption Tax (GCT)
General Consumption Tax (GCT) refers to Sales Tax or Value Added Tax, in Jamaica.
An LLC may indicate on its BRF that GCT Registration is to be carried out from the very point of incorporation. However, should the entity not expect trading to commence immediately and/or not project Gross Sales Revenue will be in excess of JMD 3m (TAJ's minimum threshold) for the first twelve months of Operation, then it would be advisable to refrain from GCT Registration until and unless these two requirements are met. The penalties for subsequent non-compliance for this tax type are weighty.
Overseas Companies should not initiate GCT Registration immediately following Registry registration, until and unless they meet the requirements, as well.
Once registered with the GCT Department, an entity will be granted Registered Taxpayer Status, specific to this tax type and will be issued a GCT Registration Certificate which authorizes the entity to collect GCT monies from clientele, accounting for same.
Following local registration, you will have to open Bank Account(s) for the operation. The banking protocol in Jamaica may be seen as comparatively comprehensive due to the Central Bank and individual Commercial Banks' various policies established to counter money-laundering, terrorism financing and general illegal activities. The Banks will require transparency and certain details, including information on the UBO of the Jamaican operation and notarized / Justice-of-the-Peace certified copies of current and valid Government-issued photograph-bearing forms of the Authorized Signatories on the Accounts and even Members of the Board. This would be in addition to copies of the entity's registration documents, projections as to income streams and amounts, estimates on weekly/monthly Account activity, etc.
It could take from two weeks to a few months to complete the opening of Bank Accounts.
The process of starting a business in Jamaica can be time-consuming and without proper and full understating of all the many details, requirements and guidelines, you could make critical mistakes which could cost your company added time and money. TMF Jamaica has the local experts to take on all the processes needed to register your business in its jurisdiction, as well as setting up your Bank Accounts, and representing you on the ground with a number of parties, including statutory and tax bodies, both at the start and on an on-going basis.
We assist local and international clients alike, providing Corporate Secretarial (CoSec) [Registration, Representation, Domiciliary, Statutory Compliance], Accounting, Tax Compliance and Human Resources (HR) and Payroll Services across the country. Talk to us.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.